Audi 2010 Annual Report Download - page 180

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As an innovative carmaker, the Audi Group is gradually broadening its model range and entering
diverse new product segments. The Company is also continually adopting new technologies such
as production methods, assistance or safety systems and drive concepts in volume production.
The entire decision-making process for new products and technologies is based on careful plan-
ning and extensive market research. In spite of these comprehensive preparations, the market
success of new products and technologies cannot always be taken for granted.
The development of new products and technologies moreover goes hand in hand with many
other potential risks. In addition to delays and changes to the product at short notice, these
include the loss of expertise to service providers outside the Group. The Audi Group protects
itself against this risk by methodically safeguarding its intellectual proprietorship of core com-
petences and consciously selecting reliable system partners.
Legal risks
The current legal framework is the basis for all activities by the corporate bodies, management
personnel and employees of the Audi Group. The Company takes a larger number of measures to
ensure that all actions taken are lawful. For example, Group-wide codes of conduct are handed
out to all employees and regular employee training on new legal requirements is offered.
In light of the growing complexity of legal requirements, the expansion of business activities
and the high international spread of the Audi Group, there is nevertheless an increasing risk of
unwittingly and therefore unintentionally acting unlawfully. In addition, it is impossible to rule
out deliberate misdemeanors by individual persons.
The compliance organization within the Company was further expanded in the past fiscal year in
order to actively counter these risks.
As a manufacturer of premium vehicles, the Audi Group has set itself the objective of comprehen-
sively satisfying its customers’ high quality expectations. Like every company, it is impossible to
exclude product liability claims altogether. These can have major financial consequences, particu-
larly if they lead to lawsuits in the U.S. market. In addition the Audi brand’s image can come
to considerable harm, permanently undermining the financial performance of the Company.
The Audi Group counteracts this risk through effective, systematic quality management and by
assuring the high quality standard of its products. Furthermore, insurance cover is taken out and
provisions are created to guard against product liability risks.
The Audi Group is not currently involved in any legal or arbitration proceedings that could have a
lasting impact on the economic position of the Group.
Personnel risks
The success of the Audi Group, as a manufacturer of technologically pioneering, high-quality
premium vehicles, will continue to hinge on the high commitment and qualifications of its
specialists and managers. Targeted human resources development and further training for
the workforce are therefore a focal area of human resources management. As an attractive
employer, the Audi Group moreover occupies an excellent position amid intense competition
to recruit well-qualified employees, and its comprehensive in-house training program actively
helps to create resources of junior personnel.
The Audi Group seeks to minimize a potential loss of expertise through fluctuation or partial early
retirement by creating high employee satisfaction, implementing wide-ranging, demand-based
incentive systems and applying intensive skills management. These involve in particular the
systematic transfer of knowledge from departing experts and managers to their successors.
The demographic change observed in Germany, which has an aging, shrinking population, presents
all companies with a major challenge. The Audi Group identified this long ago and took prompt
initiatives in order to counter this development correctly. These include programs to adapt work-
ing conditions to suit an employee’s age, models for the individual’s working life and special
part-time arrangements. They also include in-house preventive health care programs and
strengthening employee awareness about taking responsibility for their own financial future.